Correlation Between Autohome and Theglobe

Can any of the company-specific risk be diversified away by investing in both Autohome and Theglobe at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Autohome and Theglobe into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Autohome and theglobe, you can compare the effects of market volatilities on Autohome and Theglobe and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Autohome with a short position of Theglobe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome and Theglobe.

Diversification Opportunities for Autohome and Theglobe

-0.19

Correlation Coefficient

Autohome  Theglobe

Good diversification

The 3 months correlation between Autohome and Theglobe is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Autohome and theglobe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on theglobe and Autohome is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Autohome are associated (or correlated) with Theglobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of theglobe has no effect on the direction of Autohome i.e., Autohome and Theglobe go up and down completely randomly.

Pair Corralation between Autohome and Theglobe

If you would invest  23.00  in theglobe on September 29, 2024 and sell it today you would earn a total of  0.00  from holding theglobe or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Autohome  vs.  theglobe

Autohome

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autohome has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

theglobe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days theglobe has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Theglobe is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Autohome and Theglobe

The main advantage of trading using opposite Autohome and Theglobe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome position performs unexpectedly, Theglobe can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Theglobe will offset losses from the drop in Theglobe's long position.

The idea behind Autohome and theglobe pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.